Money owed to New York City related to defaulted Yankee Stadium garage bonds would remain unpaid until 2056, under terms of a deal in the works to build a new soccer stadium in the Bronx.
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The Daily News reported the deal on Tuesday. Details of the long-term agreement are available on the Municipal Securities Rulemaking Board's EMMA website.
"The terms of the new bonds presume the city will get nothing for more than 40 years. All revenue received by Bronx Parking, from the proposed soccer site as well as the parking company's other sites, would go to bondholders," Doug Turetsky of the Independent Budget Office watchdog organization said in a report detailing the restructuring waterfall.
The bonds would feature three series, two maturing in 2056, the other in 2046, according to the agreement. U.S. Bank is the trustee.
The city's Office of Management and Budget occupies a seat on the Bronx Parking board.
Bronx Parking, through the New York City Economic Development Corp., issued nearly $238 million of tax-exempt civic facility revenue bonds in 2007 to fund the garages, built as part of a city deal with baseball's Yankees to construct a new stadium adjacent to the old one. The Yankees demanded 9,300 parking spaces to accommodate the stadium, which opened in 2009.
Baseball fans, however, have shunned the garages, priced as high as $48 for valet service, for alternatives that include a new Metro-North Railroad station and free parking at the Gateway Mall several blocks away.
Bronx Parking defaulted on its bonds in the spring, and since leasing the land in 2008 has not paid the $3.2 million in annual rent or payments in lieu of taxes. The Internal Revenue Service said in July that it is auditing the transaction, which could affect the tax-exempt status of the bonds.
The soccer stadium plan emerged after the company issued a request for proposals in the spring to sublease and redevelop two sites.
The New York City Football Club, with the Yankees and the Manchester City Football Club of Britain's Premier League as part owners, would pay Bronx Parking $25 million for the land to build a 28,000-seat stadium at the site of one of the garages at W. 153rd Street, eight blocks south of Yankee Stadium.
The club plans to join Major League Soccer, the sport's dominant league in the United States, as an expansion team beginning in 2015.
Sheik Mansour bin Zayed bin Sultan al-Nahyan, a member of the ruling family of Abu Dhabi in the United Arab Emirates, owns Manchester City.
"It's an almost classic situation in the world of development politics," said Heywood Sanders, a professor at the university of Texas at San Antonio and author of the book, "Convention Center Follies: Politics, Power, and Public Investment in American Cities," scheduled for publication later this year.
"You had one really dumb deal with the garages and now they're replacing it with another dumb deal. It's very much parallel to what we see in the convention and tourism area."
Sanders said many failed deals evade public scrutiny.
"There's no national scoreboard for public finance," he said. "When these projects fail, there's often no extended public scrutiny except for a handful of interested specialists in the muni bond market. That's part of the dilemma."
